We all knew that the populist surge in India would impact on Nepali politics at some point, especially as the great neighbour across the open border to the south nears elections this year.&nbsp;
But the saffron that has begun to pigment the Nepal Tarai is different from India’s saffron wave. Events in India do colour Nepali politics, but it is important to make a distinction between India’s Hindu-tva and Nepal’s Hindu-ism.
India and Nepal both have Constitutions that guarantee the separation of politics and religion. However, at least in India, that has become a relic of the dim past. The lines between faith and ideology are becoming blurred.
Is the attraction to faith-based politics in Nepal affected by religio-cultural needs, or is it the political agenda of some political parties? There are different strands of Hindu right politics in Nepal, and we have to see the distinction.
Read also: <a href="https://nepalitimes.com/opinion/borderlines/crimson-saffron-and-green">Crimson, saffron and green</a>, Chandra Kishore
The Shah dynasty that was removed after the abolition of monarchy in 2008 is attempting to ride India’s saffron wave. The irony is that it was a Centre-Left government in India at the time that pushed for Nepal to adopt a federal republican structure.
But at the people’s level, Hinduism transcends religion--it is a way of life and its concepts of tolerance (बसुधैव कुटुम्बकम ) or equity (सर्वे भवन्तु सुखिन) touch the everyday lives of communities on both sides of the border.
Hindutva politics in India is not new; it has a long history that goes back to the independence struggle against the British. But today, it has become a part of mainstream politics. It has latched on to many contradictions and regressive ideas, but has become a political ideology of the ruling party, sidelining other secular and regional parties.
However, in Nepal, Hindutva as a political ideology is still nascent. Its seeds have been planted on a soil fertilised by democratic decay. There was an attempt to push the Hindutva agenda during the 2006 People’s Movement, but it did not take root in the desiccated post-war polity. &nbsp;
Read also:<a href="https://nepalitimes.com/editorial/faith-in-tolerance"> Faith in tolerance</a>, Editorial
But today, mainstream parties (even avowed Communist ones) are competing with each other to cloak themselves in saffron. Old, new, democratic, communist, reactionary--all kinds of parties are on the bandwagon.
Even though Nepal was till recently a Hindu monarchy, religion was never overtly the basis for politics in democratic Nepal. But because the political parties post-2006 have failed so miserably to address the people’s basic needs, they wave the saffron flag to maintain their base.
To the south, Hindutva ideologues have already identified who the ‘Others’ are. India’s minorities feel they are being targeted, and those who believe in secularism have been declared enemies of the state.
Read also: <a href="https://www.nepalitimes.com/news/india-s-hindutva-politics-influencing-nepal">India’s Hindutva politics influencing Nepal</a>, Santa Gaha Magar
Some of Nepal’s parties want to use faith-based politics to turn the clock back on republicanism and inclusion while others just want to delete secularism from the Constitution. Others want federalism scrapped. It is not just domestic disillusionment that is driving this--the wind is also blowing from the south. &nbsp;&nbsp;
India’s Hindutva forces have been involved in a decades-long strategy to influence literature, Bollywood, think tanks, the mass media, and other sectors of national life. However, in Nepal, the parties that espouse Hindutva have borrowed it for political expediency, not because they actually believe in its relevance or have a clear plan. &nbsp;
Simmering discontent with secularism was fanned by India’s Hindutva forces over time to turn it into a raging blaze. The Indian Congress and regional parties appear powerless to challenge this juggernaut at the national level. Some of them have gone soft, while others have also fallen into the trap of communalism.
In Nepal, reactionaries are using faith-based politics to jumpstart their failed careers. They do not understand that this can lead to a fluid situation with unintended consequences as we have seen with recent communal tension along the Tarai.
Read also: <a href="https://nepalitimes.com/opinion/borderlines/religiously-following-politics">Religiously following politics</a>, Chandra Kishore
The same social media symbols and tropes that are being pushed in India are also being spread in Nepal. In India, there is just the BJP that is the locomotive of Hindutva, but in Nepal it is every opportunistic party either in the fringes or mainstream. And they are all competing with each other to be more saffron.
Even the RPP and king Gyanendra have not been able to prove themselves as the main driving force. Which is why the secular parties are sanguine that Hindutva ideology does not have widespread support. &nbsp;&nbsp;&nbsp;
But it is essential to sort out whether Hindutva is just using Nepal’s open and pluralistic politics, or if it really has a larger following. There is an attempt at historical revisionism, and to a certain extent it is impacted by regional political alignments in India. &nbsp;
Whatever happens during India’s election year, Nepal’s politics has its own dynamics even if it may echo slogans heard from across the border. But this is a train they are climbing on to without knowing which way it is headed. &nbsp;&nbsp;
Read also: <a href="https://nepalitimes.com/here-now/long-leave-the-king">Long leave the King</a>, Alisha Sijapati
Chandra Kishore is a Birganj-based media commentator and writes this monthly column Borderlines for Nepali Times.
@kishore_chandra

Chandra Kishore

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The south wind blows

<figure><img width="1400" height="933" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022110714118/636903699c7e80680e037cc0jpeg.jpg" alt=""/><figcaption>Gopen Rai</figcaption></figure>In 2015 a clear majority of Nepalis chose, via constitutional assembly, to <a href="https://archive.nepalitimes.com/article/editorial/making-the-best-of-the-new-constitution,2588" target="_blank" rel="noopener">promulgate a constitution</a> that strives to unify a country with many differences, in the interests of good government, justice, prosperity, and peace.This constitution is the supreme law of the land. By accepting the sovereignty of the <a href="http://archive.nepalitimes.com/blogs/thebrief/2015/09/16/ca-passes-nepals-constitution/" target="_blank" rel="noopener">constitution</a>, Nepalis have accepted the rule of law, applicable equally to the government and to individual citizens. Ultimately then, the quality of government and of citizenship will depend on observance of the rule of law, beginning with the constitution.The constitution has introduced fundamental changes in the country’s governance. The most prominent change has been to restructure the Nepali state into 753 <a href="http://archive.nepalitimes.com/article/nation/trial-error-democracy,3713" target="_blank" rel="noopener">local governments</a>, seven provincial governments, and one <a href="http://archive.nepalitimes.com/regular-columns/Analysis/how-decentralised-is-federalism,776" target="_blank" rel="noopener">federal government</a>.Read also: '<a href="https://www.nepalitimes.com/?p=11093&amp;preview=true" target="_blank" rel="noopener">The letter and spirit</a>', EditorialArticle 232 of the constitution, which addresses the relations among the three types of government, makes clear that they are not hierarchically related, rather, their relationships 'should be based on the principles of co-existence, cooperation, and coordination'.Each type of government enjoys certain exclusive powers that can be exercised independently, with concurrent powers of the federal, provinces, and municipalities also listed in various constitutional schedules.Although each form of government has multiple, exclusive powers that can be exercised independently, the functions of these governments are significantly interdependent for the purposes of public goods and services delivery.This interdependence creates patterns of cooperation, competition, and conflict that merit serious consideration and begs the question of the role of federal government in observance of the rule of law, beginning with the constitution.Read also: '<a href="https://www.nepalitimes.com/?p=11137&amp;preview=true" target="_blank" rel="noopener">Nepal's constitution, 3 years later</a>', Prakriti KandelArticle 235 of the constitution requires the Federal Parliament to enact legislation in order to maintain coordination and to resolve disputes between and among the federal, provincial, and local governments.This role is particularly important given that there are over 300 laws that must be amended and over 100 new laws that must be drafted to fully implement constitutional provisions and address overlaps and contradictions in constitutional provisions.A quick scan of legislation enacted (or not) since <a href="http://archive.nepalitimes.com/regular-columns/by-the-way/new-constitution-should-adopt-inclusive-democracy-with-federalism-republicanism-secularism,538" target="_blank" rel="noopener">promulgation of the Constitution in 2015</a> shows an absence of care for constitutional provisions and indeed for the general defining characteristics of a society that adheres to the rule of law.Some minimum standards can be applied to substantiate this claim: for example, we can ascertain the presence or absence of legislation necessary to deliver fundamental rights to the people as stipulated in the constitution, to fulfil obligations that Nepal has towards international conventions, to adhere to directive principles of the state enunciated in the constitution’s preamble, and to clearly demonstrate a constitutional basis for the exercise of power by government.To date, legislation pertaining to fundamental rights and transitional justice have not been enacted, nor have laws on dispute resolution related to the implementation of federalism.In fact, laws that have been enacted since 2015 have mainly reduced clarity, coordination, and cooperation. Finally, laws that should provide the constitutional basis for the exercise of provincial and local government authority to federal standards have not been enacted. In their absence, provincial and local government assemblies run the risk of enacting provincial and local laws that violate or don’t meet federal standards. They, therefore, have adopted a wait-and-see approach.While legislation inconsistent with the constitution, even if duly enacted, may be held unconstitutional and so invalid, it is equally important to abide by time-critical constitutional provisions for the implementation of federalism.Since promulgation of the constitution in 2015 and <a href="https://archive.nepalitimes.com/article/editorial/the-election-fever-federal-and-parliamentary-election,3982" target="_blank" rel="noopener">successful elections in 2017</a>, devolution in Nepal is outpacing the rate at which new laws can be developed, exceeding the capacities of newly-elected representatives, and challenging the mindset of civil servants trained in a centralised, hierarchical system of public administration.The next several months will be decisive in making the difference in Nepal’s plans to share rule and self rule amongst its federal, provincial, and local governments.It will not be enough to aspire to a society characterised by political, economic, and social justice. It will require both government and citizen to observe the rule of law and submit to the constitution.George Varughese advises the Niti Foundation in Kathmandu.Read also: <a href="http://archive.nepalitimes.com/regular-columns/by-the-way/new-constitution-should-adopt-inclusive-democracy-with-federalism-republicanism-secularism,538" target="_blank" rel="noopener">Federalism, republicanism, secularism</a>, Anurag Acharya<a href="https://archive.nepalitimes.com/article/editorial/making-the-best-of-the-new-constitution,2588" target="_blank" rel="noopener">Making the best of it</a>, Editorial

Share rule and self rule

<figure><img width="800" height="1085" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022110714114/6369032c9c7e80680e037ca8jpeg.jpg" alt=""/><figcaption>Bhanu Bhattarai</figcaption></figure>The <a href="http://archive.nepalitimes.com/blogs/thebrief/2015/09/16/ca-passes-nepals-constitution/" target="_blank" rel="noopener">Constitution of Nepal was passed in 2015</a> after two Constituent Assemblies, as a part of the peace process and through a period of great social polarisation. This was followed by <a href="http://archive.nepalitimes.com/article/editorial/autopsy-of-a-blockade%20,2863" target="_blank" rel="noopener">the Indian Blockade</a>, and in 2017 through <a href="https://archive.nepalitimes.com/article/editorial/" target="_blank" rel="noopener">three tiers of elections</a> the-election-fever-federal-and-parliamentary-election,3982.This Constitution is meant to chart Nepal’s path to the future, but much depends on how sagaciously it is implemented amidst Nepal’s ever-present socio-political turmoil. It is essential to study the Constitution, to make changes where required, but to proceed to implement the letter as well as the spirit.The challenges to the implementation of <a href="http://archive.nepalitimes.com/regular-columns/by-the-way/new-constitution-should-adopt-inclusive-democracy-with-federalism-republicanism-secularism,538" target="_blank" rel="noopener">the new Constitution</a> start with many of the framers themselves not taking ownership of the text. Senior-most negotiators from the political parties claim they were forced to adopt provisions under ‘pressure’. That is unconvincing, they have a duty to take unequivocal ownership, and thereafter to do what is necessary through amendments, appropriate laws, and so on.Read also: '<a href="https://www.nepalitimes.com/?p=11142&amp;preview=true" target="_blank" rel="noopener">Share rule and self rule</a>', George VarugheseTalking of laws, the Constitution requires the adoption of hundreds of laws, and that is where the spirit of the document must carry through. Instead, not only has the political turbulence of the past couple of months delayed the drafting, much of the responsibility on the drafting has been handed to the top-level bureaucracy where there is great resistance to innovations in <a href="https://archive.nepalitimes.com/article/editorial/making-the-best-of-the-new-constitution,2588" target="_blank" rel="noopener">the Constitution</a>.The fundamental freedoms enunciated in the Constitution are very broad, and the laws are needed to make them justiciable. Missing the deadline will set a poor precedent and weaken the public’s trust in the Constitution and its ‘handlers’. Several laws have been adopted (such as in education, local government) which experts say go against the tenets of federal devolution of powers.The sense of arrogance within the ruling coalition, with its <a href="https://www.nepalitimes.com/editorial/two-thirds-empty/" target="_blank" rel="noopener">near-two-thirds majority</a>, and the disarray within the Nepali Congress following its rout last year, too, is leading to a standoff in Parliament. This is unfortunate because a minimum level of goodwill is required between the political forces if the Constitution is to be implemented through laws that uphold the spirit of representative democracy, inclusion and equity enshrined in the Constitution.Read also: '<a href="https://www.nepalitimes.com/?p=11137&amp;preview=true" target="_blank" rel="noopener">Nepal's constitution, 3 years later</a>', Prakriti KandelNo doubt, there are weak points and contradictions in the Constitution. Many new advances are not fully understood by stakeholders. There must be a sense of excitement and ownership around the Constitution. Any attempt to undermine it will not only invite socio-political chaos but will be accompanied by mass psychological distress, leading to the economy not being able to rise to the potential of Nepal’s landscape and <a href="http://archive.nepalitimes.com/article/Nepali-Times-Buzz/need-to-prepare-for-ageing-society,3624" target="_blank" rel="noopener">demography</a>.It is imperative that all forces outside of the political parties gather their forces to protect, advance and (as required) amend the Constitution. Nepal’s civil society has so far been concentrated in Kathmandu Valley, but civil action now needs to well up from all seven provinces. Nepal now has federal, provincial and local governments, and this has to be reflected in social activism.Civil society has an important role in nurturing the new Constitution and promoting its implementation. President <a href="http://archive.nepalitimes.com/blogs/thebrief/2015/10/28/the-first-woman-president/" target="_blank" rel="noopener">Bidya Devi Bhandari’s</a>  role is definitely ‘constitutional’, but by that very token one of her principal tasks must be to use good offices and goodwill to goad the government in the sagacious implementation of the laws of the land.In the meantime, recalling its well-meaning and sometimes prejudiced involvement in the Constitution-writing phase, it would help if the international community maintained a positive spirit to support implementation.No Constitution is complete by itself, besides the laws, there is a need for a corpus of court judgements and commentaries which will accumulate over time. The American Constitution was assisted in its implementation by what are known as the Federalist Papers, while the detailed deliberations in India’s Constituent Assembly, as chaperoned by BR Ambedkar, have served in understanding the spirit beyond the letter of the Indian Constitution.In the case of the Nepal Constitution, there seems to have been a lapse in not archiving the debates. Better late than never, we need to start building a corpus which will help in understanding and implementing the new Constitution.We hope the Conference on the Constitution of Nepal, 2015 which brings together constitutional experts from Nepal, South Asia and beyond, being held in Kathmandu over the weekend, will help in building commentary on the Constitution.Read also: <a href="http://archive.nepalitimes.com/regular-columns/by-the-way/new-constitution-should-adopt-inclusive-democracy-with-federalism-republicanism-secularism,538" target="_blank" rel="noopener">Federalism, republicanism and secularism</a> , Anurag Acharya<a href="https://archive.nepalitimes.com/article/editorial/making-the-best-of-the-new-constitution,2588" target="_blank" rel="noopener">Making the best of it</a>, Editorial <h2>10 years ago this week</h2> Three years after the Constitution was promulgated, we look back at the issue of Nepali Times ten years ago this week which contained a package of reportage on urban decay, lawlessness, the unacceptable rise in crime. <a href="http://archive.nepalitimes.com/news.php?id=15104#.W202gtUzbIU" target="_blank" rel="noopener">The editorial</a> in the <a href="http://archive.nepalitimes.com/issue/412" target="_blank" rel="noopener">#412 edition of 8-14 August 2008</a> week said:‘At the root of all these problems is the prolonged lack of legitimate government and the unnecessarily lengthy post-election powerplay. This is a classic example of what happens when elected leaders lack accountability and are obsessed about retaining power at all cost. Police posts removed during the insurgency need to be restored. VDC secretaries need to be in the villages. School teachers must be liberated from extortion. A stopgap political setup will have to be devised at village, district and municipality levels till the next local elections are held. Development can’t happen in the present vacuum. <img width="165" height="250" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022110714114/6369032f9c7e80680e037ca9jpeg.jpg" alt="">

The letter and spirit

The monsoon has got bad press because Nepal’s tourism operators actively told visitors to avoid <a href="https://nepalitimes.com/opinion/managing-the-monsoon?%2F">the rainy season</a>. It is time to change that. The reason can be found right here in the vast alpine meadows of Central Nepal where this time of year you can walk on velvet grass of pastures abloom with delicate pink, red and yellow flowers as the mist rolls up the valley. There is no sound except the hum of bumble bees. &nbsp;&nbsp; There are dozens of places across high Nepal called Chaurikharka, which means yak pasture. But this particular Chaurikharka in Rukum East located at an altitude of 4,000m stands out for its serene beauty, rustic charm and bucolic setting. There is just the occasional chime of <a href="https://nepalitimes.com/here-now/when-yaks-go-so-does-culture">yak bells</a> in the distance, and the sharp whistle of herders corralling sheep. &nbsp;&nbsp; The grass shoots are so fragile that one hesitates to step on them, the rounded ridges appear and quickly vanish in waves of mist. With the<a href="https://nepalitimes.com/here-now/before-the-next-monsoon"> arrival of monsoon</a>, these meadows are a soothing shade of green dotted with millions of <a href="https://nepalitimes.com/review/the-anatomy-of-a-flower?%2F=">multi-coloured flowers</a>. Until very recently, it took a week or so to hike up to places like Chaurikharka, but with the expansion of the road network even to these far-flung mountains in the lap of Dhaulagiri, they are much more accessible. It is just a three-hour uphill from the Mid-Hill Highway on the border between Baglung and Rukum East.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250802130828_a0b06b494d751b2144ffbbf10894ea64b29e8aed844bc8c66171783abfaf4e16.jpg" data-media-id="editor_4" data-image-id="20250802130828_a0b06b494d751b2144ffbbf10894ea64b29e8aed844bc8c66171783abfaf4e16" data-rendition-name="original" width="2048" height="1365" loading="lazy" alt="Visit Nepal in the monsoon"> </figure>  Purists would say that such easy access devalues the sanctity of these remote high meadows, but it also means more people will be moved to treasure the experience, appreciate <a href="https://nepalitimes.com/banner/natures-fragile-gift-to-nepal">the value of nature </a>so they can take steps to protect it.&nbsp; To be sure, the <a href="https://nepalitimes.com/here-now/deadly-monsoon-in-nepal-turns-deadlier">monsoon season can be challenging for road travel</a>. The roads are rough even at the best of times, and in the monsoon they become muddy and treacherous, often blocked by<a href="https://nepalitimes.com/news/monsoon-deluge-in-nepal"> landslides</a>. But that could be precisely the kind of adventure that the more intrepid visitors crave. Improved road connectivity has already made Chaurikharka and places like Badimallika &nbsp;and other sacred lakes in the mountains of western Nepal popular with domestic tourists. What is driving this traffic is the urge to go to exotic new places and share videos and selfies on social media. Several of Nepal’s travel vloggers have visited Chaurikharka and popularised the place, enticing followers on TikTok or YouTube to retrace their footsteps. But even as they become more popular, these fragile and once-remote places should be protected from over-tourism.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250731110736_f97110b7cdc3e7f80d5877690948fc9f4c95a09c583deb23b07355491e6c5446.jpg" data-media-id="editor_8" data-image-id="20250731110736_f97110b7cdc3e7f80d5877690948fc9f4c95a09c583deb23b07355491e6c5446" data-rendition-name="original" width="1083" height="699" loading="lazy" alt="Visit Nepal in the monsoon NT"> </figure>  <h2>INCREASING FOOTFALL</h2> Chaurikharka is located in Bhume Rural Municipality of East Rukum, near the scenic valley of Dhorpatan in Baglung district. Even in the <a href="https://nepalitimes.com/banner/monsoon-culture">middle of the monsoon</a>, there is a steady stream of Nepali hikers trooping to these high pastures – especially during festival days like Saune Sankranti which this year was on 17 July and actually marks the auspicious beginning of the monsoon here. “This year the rains have not been as heavy and there have been some clear mornings when we could see everything from Dhaulagiri to Machapuchre,” says Khageswar Bhandari, who trekked up here from the road. “The flowers, the greenery and the snowy mountain views make this an incredibly unique place.”&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250802130824_1b9e26f2e9853fdfe69154bb42a7c9ea6da4bf4940efc1da99b304dcfbd7d3d9.jpg" data-media-id="editor_10" data-image-id="20250802130824_1b9e26f2e9853fdfe69154bb42a7c9ea6da4bf4940efc1da99b304dcfbd7d3d9" data-rendition-name="original" width="2048" height="1152" loading="lazy" alt="Visit Nepal in the monsoon"> </figure>  Chaurikharka is worthwhile to get to in any season, but it has a different charm during the monsoon. Word has spread and because it is now easy to get to from Baglung or even Pokhara, people have been flocking here.&nbsp; “Holidays and Saturdays see the largest crowds, with up to 500 visitors every day,” says ward chair Mankaji Pun of Bhume.&nbsp; There was a time not too long ago when local herders brought sheep, goats, cows, buffaloes, horses, and mules to graze here during the monsoon. Although there are still livestock around, animals have been replaced by visitors taking selfies. Read also: <a href="https://nepalitimes.com/here-now/the-monsoon-and-nature-s-arithmetic">The monsoon, and nature’s arithmetic</a>, Tom Robertson Ward Chair Pun says infrastructure development is his main priority. A foot trail to Chaurikharka was built last year by the Tourism Division Office in Kohalpur, but access via the Raniwas-Koipa road section still remains challenging.&nbsp; “If we get more budget, we can improve the road and facilities to make Chaurikharka the main tourist attraction of this region,” says Bhume Municipality Chair Hom Prakash Shrestha. “After that, we hope to promote Chaurikharka as a top tourist spot.”&nbsp; Economic activity is also picking up with the arrival of visitors, but there seems to be a need to manage the makeshift sheds made of corrugated sheets that spoil the beauty of the place. Tea shops and lodges are also available but facilities are basic. Kuldeep Neupane took a three-day trip from Ghorahi in Dang to visit Chaurikharka recently, and says: “This is an ideal trip to make a quick getaway and let nature recharge your mind and body. And it is much more fun with a tent, to watch the sunrise over the Himalaya or the mist blowing in.”

Visit Nepal in the monsoon

Nepal is graduating to become a developing country on 24 November 2026 after half-century in the Least Developed Country (LDC) category. By 2030, the country hopes to transition to middle-income status.&nbsp; Everone from Prime Minister K P Oli have boasted that this is a matter of national pride, and will have a multiplier impact on trade and economy.&nbsp; But will it make any difference to the average Nepali? Not unless improved governance <a href="https://nepalitimes.com/news/why-invest-in-nepal">spurs investment and creates jobs</a>.&nbsp; Countries need to meet at least two of the three criteria in two consecutive triennial reviews to be eligible for graduation from LDC. Nepal has consistently met the thresholds for the Human Assets Index (HAI) and the Economic and Environmental Vulnerability Index (EVI) in 2015, 2018, and 2021. But Nepal was recommended for graduation before meeting the per capita <a href="https://nepalitimes.com/banner/nepals-great-income-divide">Gross National Income (GNI)</a> threshold of $1,306. “A major implication of LDC graduation is the loss of preferential market access available through Generalised System of Preferences (GSP) and other arrangements,” explains economist Sameer Khatiwada. “But over two-thirds of <a href="https://nepalitimes.com/news/nepal-doesnt-produce-its-2-biggest-export-items">Nepal’s exports</a> are to India, and the preferential market access to India is through a bilateral trade agreement. This has nothing to do with our LDC status.”  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250815060832_f5eabe7628a8cdf84f33b25d7cef3c4dc8913a26d8e5b253ea52a36e176b8a85.jpg" data-media-id="editor_3" data-image-id="20250815060832_f5eabe7628a8cdf84f33b25d7cef3c4dc8913a26d8e5b253ea52a36e176b8a85" data-rendition-name="original" width="640" height="470" loading="lazy" alt="LDC graduation "> </figure>  Furthermore, a provision under the South Asian Free Trade Area (SAFTA) allows Nepal to export to India duty-free if the items are at least 30% value-added. Nepali traders take advantage of this by re-exporting edible oils without meeting that requirement, falsely boosting Nepal’s exports.“ Following graduation from LDC, the value addition threshold might increase to 40%,” says Kalpana Khanal of the Policy Research Institute. “This is supposed to work to our advantage, because on paper value addition inherently means <a href="https://nepalitimes.com/multimedia/staying-home-to-create-jobs">job creation at home</a>.” But Nepal’s exports to other major destinations will face <a href="https://nepalitimes.com/news/nepal-and-the-us-india-tariff-tiff">tariff increases</a> with the graduation. A South Asia Watch on Trade, Economics and Environment (SWATEE) study shows that while tariff increase in the US market is relatively low (see page 5) it is considerably higher in Europe. The International Trade Centre (ITC) in a 2022 study also estimated that graduation could result in a 4.3% decline in Nepal’s projected exports, but this is excluding the impact of changes in ‘rules of origin’ provisions in preference-granting countries such as the UK and Europe.&nbsp; Nepal’s top export to these preference-granting countries is <a href="https://archive.nepalitimes.com/news.php?id=1482">carpets</a>, and will not be impacted, but other items such as textiles and apparel will be heavily affected due to higher cost of production. The impact will felt mostly by small and medium enterprises which represent the largest share of exports to LDC-specific preference-granting countries. As for the service exports, Nepal never really made use of the World Trade Organization’s LDC services waiver anyway, hence the effect will be minimal, if any. There is also concern about Nepal’s graduation at a time when the global economy is topsy-turvy, amidst <a href="https://nepalitimes.com/opinion/turning-point-in-us-india-relations">tariff wars and conflicts</a>. This affects Nepalis abroad directly and may impact <a href="https://nepalitimes.com/news/more-remittance-more-than-remittance">remittances </a>which hit $11 billion in 2024. In comparison, Nepal only received $350 million in foreign loans and grants last year.&nbsp; Tourism arrivals have finally reached pre-pandemic levels, but bad publicity about pollution, poor infrastructure and bureaucratic hurdles hinder further growth. Manufacturing continues to struggle, while hydropower and the IT sector have taken off.&nbsp; “Look at data -- <a href="https://nepalitimes.com/news/tourism-needs-a-new-push">tourism arrivals</a> are up, spending is up, IT exports are up, <a href="https://nepalitimes.com/news/why-nepal-needs-to-restore-ev-tax-subsidy">EV sales </a>are up, Europe still needs 85-90 million skilled workers. We are sitting on $16 billion in cash reserves, our balance of payment, foreign exchange reserve, tax to GDP ratio, credit flow are all positive, we have to build on these factors,” says Sujeev Shakya of the Nepal Economic Forum. He adds: “Our mindset creates negativity to promote rent-seeking behaviour, but this cynicism will go away after 2026 with LDC graduation. We must deal with data, look at trends, and projects which will bring in <a href="https://nepalitimes.com/from-the-nepali-press/why-there-is-no-foreign-investment-in-nepal">international investments</a>.” Khanal agrees that investment is not dependent on<a href="https://archive.nepalitimes.com/regular-columns/backside/Nepal-not-the-least-developed-country,306"> LDC status</a>. The factors that that affect investment are policy stability, a strong legal framework, market potential and ease of doing business. She adds, “That is where our focus needs to be, and we need to retain <a href="https://nepalitimes.com/diaspora-diaries/migrant-worker-returns-to-create-work-at-home?fbclid=IwAR09xJfsClCwn8uRVAmz28CU658vdKpuyDwB_b1sNlvKtAFFnSldnA0JS2g">Nepalis with jobs at home</a> for our sustained growth.” After 2026, financing support from donors and aid agencies could be affected and Nepal will no longer be able to access Least Developed Countries Fund (LDCF) to adapt to the impacts of climate change. But the Global Environment Fund and Green Climate Fund will still be available.“ LDC status does not determine bilateral development aid, that is usually driven by broader <a href="https://nepalitimes.com/here-now/looking-beyond-two-boulders">geopolitical considerations</a>,” says Sameer Khatiwada. “The World Bank and Asian Development Bank, which provide concessional loans to Nepal, it is determined mainly by per capita income, not LDC status.” &nbsp;However, Nepal may lose some concessional terms for loans. Nepal is currently a lower-middle-income country as per the World Bank in the bracket for GNI between $1,036 and $4,045. The country is already receiving more loans than grants and in July the World Bank increased its interest rate on loans by 100% from 0.75 to 1.5%. “All this means that the impact of LDC graduation for Nepal might not be as earth-shattering as some tend to think. Countries that have recently graduated, such as Botswana and the Maldives, have shows that graduation is just a step in a country’s development path,” says Khatiwada. Sujeev Shakya also sees the glass as half full, explaining that LDC graduation is just a stepping stone if Nepal has the right policies in place. He adds, “Nepal’s biggest advantage is our<a href="https://nepalitimes.com/opinion/investing-in-people"> working age population</a> and we have investments coming in. These aided by how adaptive we are as a society are the very foundations on which Nepal will grow.”

Not poor, but not rich

Two weeks ago, Prime Minister KP Sharma Oli announced jubilantly on social media that Nepal had achieved a historic annual growth of 81.8% in exports. He was right. Nepal’s trade did take a great leap forward compared to last year. But the dramatic rise was mainly due to processed soya bean oil.&nbsp; However, Nepal does not produce the edible oil it exports. In fact, the soya and palm oil that make up 44% of total exports are imported from Southeast Asia and South America, and simply re-exported, mostly to India.&nbsp; Under the SAFTA (South Asian Free Trade Area) Agreement, Nepal can export products to India duty-free if it has at least 30% value-added. Nepal’s traders have taken advantage of SAFTA even though the edible oils they export do not reach that value addition threshold. “The 30% value addition requirement is often only on paper,” says former commerce secretary Purushottam Ojha. “It is clear that simply packaging edible oils in Nepal does not fulfil the terms of the trade agreement.” Prime Minister Oli is aware of this, and even called Nepal’s export figures “fake” at an earlier event. The government is relying on other iffy figures to suggest that Nepal’s economy is strong and getting stronger. For example, the value of imports rose by 13.25% in 2024-25 compared to the previous fiscal year.&nbsp; Some of it was due to a jump in electric vehicle imports worth Rs 31.76 billion, but mostly it was because more wholesale soya oil was imported to be re-packaged and sold in India. The very fact that the government boasts about increased imports is an indication of how much it relies on taxing them for revenue. Touting such trade figures cannot be the basis to claim an economic rebound.&nbsp; “A jump in the value of imports can be interpreted as an increase in purchasing power, but it is not evidence of a stronger economy,” says economist Keshav Acharya. “Even though imports have increased, Nepal's domestic production and productive capacity have not improved.” Nepal Rastra Bank's semi-annual economic activity study report shows that industrial production was down in the first six months of the last fiscal year. This despite an increase in the number of new industries registered and investment commitments. Out of the Rs70.2 billion proposed foreign investment, Nepal received only Rs17.9 billion last year.&nbsp; Meanwhile, the rate of capital formation was limited to 24% last year, which is lower than the year before, suggesting that new investment, job creation and economic expansion all declined. If domestic production does not improve in relation to this year’s inflated trade figures, the outflow will put pressure on foreign exchange reserves like it did three years ago. At that time, Nepal borrowed from the IMF under its Extended Credit Facility Program to kickstart the economy.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2025080710084_2cdaaa5795828c4a7de93a0604ba884ef0a8b8f24cccd939f6c24e279ab6058f.jpg" data-media-id="editor_0" data-image-id="2025080710084_2cdaaa5795828c4a7de93a0604ba884ef0a8b8f24cccd939f6c24e279ab6058f" data-rendition-name="original" width="1633" height="723" loading="lazy" alt="Nepal's bubble economy NT"> <figcaption>Source: NEPAL RASTRA BANK</figcaption> </figure>  The macroeconomy is on firm footing with foreign exchange reserves at a comfortable Rs2,520 billion in May, up 23% from last year. This was largely due to remittances, and partly due to a falling NPR exchange rate. Real estate transactions and the stock market index have also been climbing as a result of government policies to revive the sector.&nbsp; However, former executive director of Nepal Rastra Bank Nar Bahadur Thapa cautions: “This is not organic growth, it is the result of deliberate policy decisions to relax rules on real estate and stock markets transactions.” In reality, the sharp rise in land prices have increased the cost of production, and excessive monetisation of the real estate has become the main source of Nepal’s economic woes. The central bank has announced a slew of new policies, shifting the terms of loan repayment for industrialists and entrepreneurs, reducing interest rates, and injecting more working capital — all designed to inject adrenaline into the real estate and stock market sectors.&nbsp; When he was governor, Mahaprasad Adhikari made several financial reforms during the latter half of his tenure to stimulate the economy, including tightening credit flow.&nbsp; By the last fiscal year, additional financial reforms had resulted in a credit expansion rate of around 8%. As the pace of credit expansion slows, real estate prices have started to fall. This is actually beneficial to the economy, because it lays the foundation for improvements in land-related entrepreneurship, production, and the construction sector. Just because real estate and the stock market transactions increase, it does not indicate an economic turnaround — especially when manufacturing and productive sector continues to languish.&nbsp; “It is foolish to believe that real estate and the stock market have magically revived our economy. Agriculture employs more than half of the population, but it is in decline. Investment in the productive sector has not increased, and job creation has not increased.” Two years ago, Nepal’s industrialists, business leaders, and political leadership predicted a recession amidst a sluggish business, declining market demand, large-scale job loss, and a shrinking real estate and share market.&nbsp; Still, the economy grew by 3.36% in fiscal year 2023/24. In fact, Nepal’s economy has grown nominally over the last two decades even when all sectors of the economy are in decline.&nbsp; Says Keshav Acharya: “The growth in trade, real estate, and the stock market are bubbles. The real economy remains stagnant.”

Nepal’s bubble economy

American artist Peter Makela was in Nepal in 2022 on a Fulbright scholarship when he experienced the Matya festival in Patan in which devotees made the rounds of the city’s shrines.&nbsp;
He joined the procession, walking through 2,600 stupa and 140 bahal of the town. That immersion left a lasting impression.
As part of Gallery Mcube’s international residency program in Patan, he put his inspiration to canvas in the exhibition Yala Yatra: Walking, Working, Worshipping. The exhibition also coincides with this month’s Matya festival.&nbsp;
Makela has visited Nepal often in the past 11 years but he mostly stayed in and spent his time around Boudha. “This time I stayed in Patan, put the sites I wanted to visit on my map, and off I went,” he tells us. “Each of my artwork is inspired by the stupas and shrines in Patan that I visited.”
The stupa and Ganesh are recurring motifs in his watercolours, and the elephant gods are located in chaityas — reflecting the interplay and blending of the Hindu and Buddhist faiths in Kathmandu Valley.&nbsp;
The stupas and Ganesh are painted in vivid red, yellow, blue and green against abstract backgrounds meant to represent the sky.
“I use the sky as a backdrop because the sky has no border,” says Makela. “The four colours represent the four elements, the different Buddha families and also lights bouncing off of a rainbow.”
The use of just four colours for all the artwork stands out, and combined with the absence of heavy canvases, frames or stands render Makela’s art striking in its simplicity.&nbsp;
The Ganesh is always holding something and the art also portrays the elephant god’s sacred vehicle, the mouse.
While his vibrant stupas and Ganesh reflect the tangibility of Patan’s tradition and heritage, it is as if the backdrops with their shades of grey and red and yellow capture the soul of the city’s shrines.
“If you look closely, there is a sense of form and formlessness at the same time,” he says.&nbsp;
Makela walked 108 kora around the shrines during his exploration of the town, and in the process developed a spiritual connection with Patan’s heritage and traditions.&nbsp;
The exhibition connects with visitors on a deeper, more spiritual, level as well. And with it, they feel a sense of pride as well as the need to urgently preserve Patan’s heritage for future generations.
“Peter’s inclination and approach towards Nepali art and culture is fascinating, and it reflects in his work,” says Mcube curator Manish Lal Shrestha, whose international artist residency program promotes Nepal’s cultural heritage. &nbsp;&nbsp;
Yala Yatra: Walking, Working, Worshipping
1-5 August&nbsp;
10AM-7PM
Gallery Mcube, Patan